Shopify(US:SHOP)2023-11-01 16:00Financial Performance - Shopify reported a total revenue of $1.6 billion for the third quarter of 2023, representing a 20% increase compared to the same period in 2022[1]. - Total revenue for the nine months ended September 30, 2023, was $4.9 billion, an increase of 27% compared to the same period in 2022[24]. - Total revenues increased by 25% to $1,714 million for the three months ended September 30, 2023, compared to $1,366 million in the same period in 2022[49]. - The company reported a net income of $718 million for the three months ended September 30, 2023, compared to a net loss of $1.311 billion in the same period in 2022[78]. - Loss from operations for the nine months ended September 30, 2023, was $1.748 billion, compared to a loss of $634 million in the same period of 2022[101]. Revenue Breakdown - Subscription solutions revenues accounted for 27% of total revenues, with an increase from $1.1 billion in the nine months ended September 30, 2022, to $1.3 billion in the same period of 2023, representing a growth of 21%[25][26]. - Merchant solutions revenues increased from $2.8 billion in the nine months ended September 30, 2022, to $3.6 billion in the same period of 2023, representing a growth of 30%[27]. - Subscription solutions revenue for the three months ended September 30, 2023, was $486 million, compared to $377 million in the same period of 2022, marking a growth of 28.9%[46]. - Merchant solutions revenue for the three months ended September 30, 2023, was $1,228 million, up from $989 million in the prior year, representing a growth of 24.2%[46]. Monthly Recurring Revenue (MRR) - Monthly Recurring Revenue (MRR) was reported at $115 million, reflecting a 10% growth from the previous year[1]. - Monthly Recurring Revenue (MRR) totaled $141 million as of September 30, 2023, reflecting a 32% increase compared to $107 million at the same date in 2022[26][34]. - The company expects continued MRR growth as cohorts of merchants convert from paid trial incentives to full-price subscription plans[36]. Gross Merchandise Volume (GMV) - For the nine months ended September 30, 2023, the platform facilitated Gross Merchandise Volume (GMV) of $160.8 billion, representing an increase of 18% from the same period in 2022[23]. - Gross Merchandise Volume (GMV) facilitated through the platform was $56 billion for the three months ended September 30, 2023, and $161 billion for the nine months, reflecting a quarterly growth of 22% and a year-to-date growth of 18%[37]. Operating Expenses and Profitability - Total operating expenses for the three months ended September 30, 2023, were $779 million, down from $1,008 million in the same period of 2022, a decrease of 22.7%[46]. - The gross profit margin was 53% in Q3 2023, an increase from 49% in Q2 2023[82]. - Total operating expenses were 45% of revenues in Q3 2023, compared to 146% in Q2 2023, reflecting a significant reduction due to workforce reductions[82]. Investments and Acquisitions - The Deliverr acquisition is anticipated to influence operating expenses and comparability of quarterly results moving forward[6]. - The company sold its logistics business assets to Flexport in the second quarter of 2023 to optimize logistics offerings[30][31]. - The company raised approximately $7.8 billion from investors through the sale of equity securities and notes[88]. Currency and Foreign Exchange Risks - Shopify's international expansion is expected to be impacted by foreign currency fluctuations, which may affect reported subscription revenue[6]. - The company is exposed to foreign currency exchange risks, with significant revenues and expenses denominated in GBP, EUR, and CAD[100]. - A 10% strengthening of foreign currencies would have a negative impact on revenues, cost of revenues, operating expenses, and loss from operations[102]. Sustainability and Social Responsibility - Shopify has committed at least $5 million annually to its sustainability fund since 2019, partnering with over 20 climate companies to combat climate change[21]. Internal Controls and Governance - Management is responsible for maintaining adequate internal control over financial reporting to ensure reliability in accordance with U.S. GAAP[113].